Legal Updates

When a third party to a bill of lading demands compensation for cargo damage its claim is not limited to one year

May 5, 2025
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A logistics company sought compensation from a shipper for damages caused to cargo transported by it from Japan to the port of Haifa, even though it did not appear as a party to the bill of lading and more than one year lapsed from the date of delivery of the cargo.

The Supreme Court held that the logistics company has the right to seek compensation despite the lapse of time. Generally, a claim for compensation against a shipper becomes barred due to the Statute of Limitation after the lapse of one year from the date on which the cargo was actually delivered or the date on which it should have been delivered. However, this period is relevant only to the parties specified in the bill of lading, who enter into the contract of carriage and those who step into their shoes, but not to third parties. The reason for this is that parties to the bill of lading are given the option to condition in the bill on the provisions of the law, so that they can have various obligations and protections, while a third party is not given a similar option and therefore it is not just to impose provisions that limit its rights. Here, the logistics company is not a party to the bill of lading and therefore its right to demand compensation is not limited to one year. Therefore, its demand from the shipper has not become barred.

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